Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2004 ONFSCDRS 5

Appeal P03-00004

OFFICE OF THE DIRECTOR OF ARBITRATIONS

MARLON SWABY

Appellant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Respondent

Before:

David R. Draper

Representatives:

Guy Farrell for Mr. Swaby

Todd J. McCarthy for Allstate

Hearing Date:

June 27, 2003, with additional written submissions filed in October and November 2003.

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The appeal is dismissed and the arbitration order, dated January 15, 2003, is confirmed.
If the parties cannot agree on appeal expenses, they may request a determination of this issue by writing to the Commission within 30 days of this order, as set out in Rule 79.1 of the Dispute Resolution Practice Code.

January 8, 2004

David R. Draper Director of Arbitrations

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This appeal involves the definition of “accident” in the 1996 version of the SABS – “an incident in which the use or operation of an automobile directly causes an impairment . . .”¹ It is being released with three other decisions that consider this definition in different fact situations.² In this case, Marlon Swaby was shot in the leg and had his throat cut by unknown assailants who stole his car. The Arbitrator concluded this was not an “accident” and, therefore, no accident benefits were payable. Mr. Swaby appeals. For reasons set out below, the appeal is dismissed.

II. BACKGROUND

The facts, as found by the Arbitrator, are brief:

On the day of the incident [December 6, 2001], the Applicant had parked his vehicle in a school parking lot. He sat in his car with the engine running while he awaited the arrival of a friend who was going to give him a lead for a job. While he was waiting, he opened the driver’s side door of the car and put his leg outside to examine the door panel. Earlier that day he had purchased two door speakers and was inspecting the door to determine how they might be installed.

The Applicant was then approached by an individual who told him that he wanted the Applicant’s car and ordered him out of the car. The Applicant attempted to close the door on this person but he grabbed the Applicant and attempted to drag him out of the car. The Applicant attempted to drive away, but was unable to do so.

A second individual approached the Applicant’s car and put a knife to the Applicant’s throat and ordered him out of the car. As it turned out, the Applicant’s throat was cut and he was shot in the upper left leg. He lost consciousness and later awoke in nearby bushes. A passerby found the Applicant and called an ambulance. He was transported to Sunnybrook Hospital where he received stitches to his throat and left thumb and underwent surgery on his left femur. (pp. 2-3)

The Arbitrator held that although the car provided the opportunity, location and motivation for the incident, the gun shot and stabbing were intervening acts that directly caused Mr. Swaby’s injuries. Consequently, Mr. Swaby was not injured in an accident, as defined in the SABS-1996.

III. ANALYSIS

On appeal, the parties made essentially the same arguments as at arbitration. While I want to respond to their submissions, I have little to add to the Arbitrator’s analysis. Her decision is consistent with the approach taken in other cases involving assaults, which I accept.³

Mr. Swaby claims the Arbitrator erred in her interpretation of “accident.” In his submission, the required connection is not between the use or operation of the automobile and the impairment, but between the incident and the impairment. Following Mr. Swaby’s approach, the first question is whether there was an incident involving the use or operation of an automobile. In this case, he argues there clearly was – a car-jacking. The next question is whether he was injured as a direct result of this incident. Again, he argues that he was.

I do not accept this analysis. A plain reading of the definition requires a direct causal connection between the use or operation of an automobile and the impairment. Moreover, Mr. Swaby’s analysis is inconsistent with the approach taken by the Ontario Court of Appeal in Chisholm, cited above. In the first paragraph of that decision, the Court states that entitlement “turns on whether ‘the use or operation of an automobile directly cause[d]’ his injuries.” Later, the Court reinforces this interpretation, holding that “insured persons are entitled to accident benefits only if their impairment or injuries are directly caused by the use or operation of an automobile.”⁴ Finally, in rejecting a “but for” test of entitlement, the Court states that “[l]egal entitlement to accident benefits . . . requires not just that the use or operation of a car be a cause of the injuries but that it be a direct cause.”⁵

On the facts in Chisholm, the Court concluded that the plaintiff, who was shot by an unknown assailant while driving his wife’s car, was not injured in an “accident,” as defined in the SABS-1996. Mr. Swaby’s situation is somewhat different. He was not injured in a random shooting. Much like the situation in Amos v. Insurance Corporation of British Columbia (1995), 1995 CanLII 66 (SCC), 127 D.L.R. (4th) 618, [1995] 3 S.C.R. 405, he “was shot and stabbed in a struggle for possession of the car.” What, Mr. Swaby asks, can be more connected to an automobile than possession by its owner? Pointing out that theft is specifically covered under the standard motor vehicle liability policy, he submits that any injuries he suffered in attempting to retain control of his car must be covered.

Mr. Swaby’s position is sympathetic. There is no doubt that his automobile played a role in this incident. As the Arbitrator acknowledged, it provided the opportunity, location and motivation. Given the similarities with Amos, Mr. Swaby probably would have met the two-part test set out by the Supreme Court of Canada in that case. However, that test was based on British Columbia legislation which provided for the payment of benefits “to an insured in respect of death or injury caused by an accident that arises out of the ownership, use or operation of a vehicle . . .” In the course of its decision, the Court noted that this version of the legislation had broadened the scope of coverage, adding the words “use” and “ownership.” It also placed considerable importance on the use of the phrase, “arises out of,” as opposed to “caused by”:

With respect to causation, it is clear that a direct or proximate causal connection is not required between the injuries suffered and the ownership, use or operation of a vehicle. The phrase “arising out of” is broader than “caused by”, and must be interpreted in a more liberal manner. [emphasis added]

The Ontario Court of Appeal used the Amos test in interpreting the definition of “accident” in the previous version of the SABS,⁶ which provides as follows: “an incident in which, directly or indirectly, the use or operation of an automobile causes an impairment . . .”⁷ The Court held that although the wording was different, it was close enough that the Amos test could be used. That changed with the SABS-1996. In Chisholm, the Court of Appeal held that under the amended definition, an insured person seeking accident benefits must meet “a narrower or more stringent causation test” that reflects the government’s intention to limit coverage, “[u]ndoubtedly as a cost saving measure.” In this context, the Court held that “the Amos test, or at least the causation part of the test, can no longer be used to interpret the definition.”

The Court then considered the meaning of “directly causes.” As noted above, it rejected a “but for” test of causation. Therefore, it is not enough to say that Mr. Swaby would not have been injured if he had not been in his automobile, or that his automobile was the focus of the incident. He must establish that his impairments were directly caused by some use or operation of his automobile. The problem for Mr. Swaby is that his impairments were caused by the stabbing and gunshot. As the Arbitrator held, following the appeal decision in Kumar, the automobile provided “the opportunity, location and motivation for the assault, it did not directly cause an impairment.” Put differently, the gunshot and stabbing were intervening acts that caused Mr. Swaby’s impairments.

As the Court of Appeal noted in Chisholm, the legislation creates difficult boundaries. If Mr. Swaby had attempted to flee from the car-jackers and crashed, injuring himself, he would have been entitled to accident benefits because his use or operation of the automobile – driving – directly caused his impairment. However, on the facts presented here, he falls outside the definition of “accident.”

IV. APPEAL EXPENSES

The parties did not address the question of appeal expenses. If they are unable to reach an agreement, they may request a determination of this issue by writing to the Commission within 30 days of this order, as set out in Rule 79.1 of the Dispute Resolution Practice Code.